Combine water and sugar in medium saucepan. Bring to a boil and cook until slightly thickened, about 3 min. Add hazelnut and vanilla extracts, and whisk in cocoa powder until thoroughly combined. Reduce heat and simmer for 20 to 25 min. Remove from heat and allow to cool. Store in the refrigerator in an airtight container.
Use to sweeten coffee or cocktails. Pour over ice cream or use to flavor milkshakes.